Attorney General's News Release

Augist 9, 2000

Gasoline Price Task Force verifies profit-taking by oil company refineries but uncovers no illegal activity

Jefferson City, Mo. — The Governor's Task Force on Gasoline Prices reported today that a one-month study of high gas prices in Missouri documents excessive profit-taking by oil companies and their refineries but uncovers no illegal activity in Missouri.

The task force, headed by Attorney General Jay Nixon, said prices reached a statewide record of $1.80 per gallon for regular gas on June 15 at a time when oil company refineries were enjoying profit increases of up to 300 percent or more during the second quarter of this year compared to the same time period last year.

The report documents Phillips Petroleum profits increased from $108 million in the second quarter last year to $439 million in the same quarter of 2000. Conoco posted similar earnings of $460 million as compared to $114 million during last year's second quarter. ExxonMobil, the largest oil company in America, increased profits 123 percent in this quarter compared to the same quarter last year.

"Our charge was to determine why prices rose, who profited and whether illegal activity occurred," Nixon said. "While we were able to answer those questions, the concern remains that Missourians are vulnerable to price fluctuations that have the potential to threaten our economy."

"It is clear that those who are profiting are the major oil companies and their refineries. A high level of competition at the retail level in Missouri has prevented even greater price increases," Nixon said.

Nixon said the construction of two ethanol plants in Missouri will foster increased gas supplies and should make Missouri less vulnerable to out-of-state refineries and could lessen its dependency on non-domestic produced fuels. The task force also reported that reformulated gasoline requirements may negatively impact a refiner's storage capacity but only slightly increases the cost of production.

The report shows an AAA survey in early July found that the average costs of St. Louis reformulated gas was $1.61 per gallon, while conventional unleaded gasoline in Kansas City was priced at $1.62 per gallon.

In addition to Nixon, the task force was composed of the Department of Economic Development (DED), the Department of Agriculture (MDA) and the Department of Natural Resources (DNR). The group held hearings in St. Louis, Kansas City, Malden and two in Jefferson City and heard testimony from representatives of gasoline retailers, the ethanol industry, various state departments, the oil refining industry and consumers.

Subsequent to the statewide hearings, the price of gas has dropped to an Aug. 7 average of $1.33.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818